The Twist-er Tantrum: Bernanke Unleashes 5-Sigma Curve Flattening

Despite the absolute assurances (by your friendly local asset gatherer) that a taper would unleash hell in the bond markets, a decidedly one-sided market has seen a tremendous squeeze in the last 2 days. Echoing Operation Twist’s effort, the term structure of Treasury yields has collapsed by 5 standard deviations to 3-month flats.



Our suspicion is that traders were positioned for a taper and weakness (steepening) in bonds  and when that did not materialize in size, exits were hit in a hurry… either that or macroeconomic growth and reflation hopes and dreams are dashed in the reality of bond premia.


via Zero Hedge Tyler Durden

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